I am not in the freight audit business. I do however spend hours upon hours each week wading through a myriad of shippers’ parcel invoices, studying patterns and looking for ways and means to either reduce costs or improve service (or some combination of thereof). My experience is that you pay the USPS up front, you calculate the expected cost, and it’s up to the USPS to catch you doing it wrong. (Sometimes they do, and at times it can be very painful).

The integrators operate differently in that they bill you for services provided, and if you have transmitted information they believe to be in error they correct the defect, and bill you for what they deem appropriate, or a balance due for the difference.

The systems used to invoice millions of transactions a day are very sophisticated. After all the price is determined by what the transaction weighs (actual, reweighed or dimensional), and by the distance the shipment transits, and the level of service requested, and if it’s going to a residence versus a commercial address, and then any special services you might ask for, or for which they charge extra, and then add on top of all of that the fuel surcharge, some of which applies even to the accessorial charges.

Now add the variable that you may have negotiated base discounts, compounded by earned discounts, and then negotiated discounts for your accessorial charges and fuel.

You can appreciate that the opportunity for things to go wrong is great. Then add in the human factor where it’s a clerk in coding that loads your particular agreement into the rating system of the carrier. We are all human, and at times err. 

I will grant that the carriers do an outstanding job at billing and operate in the high 90’s with accuracy. They are quick to correct errors if you can detect them and demonstrate to them that your calculation is one amount and what they are billing is another, and based on the agreement you detect that they are doing it wrong. I don’t believe for a moment that anyone at the major carriers wants to be party to intentional overbilling.

Here is the issue at hand that prompted my penning these thoughts. If you are not checking your January invoices perhaps it’s time to put someone on it, or to consider employing the services of a third party audit firm. (I can recommend some if you have no idea who is good at this). I am not talking about auditing for service performance. There are tons of folks out there that do that. I’m talking about checking the accuracy of rate and contract application. Real green eyeshade stuff.

I’m talking about firms that when they detect a disconnect between invoice and contract they communicate with the carrier to correct the fault, so that invoices don’t continue to be misrated, and therefore may line the auditors pockets by sharing in the defects captured over and over again.

As you know, if you read parcel with any regularity, that the dimensional rules changed at the end of the year and many shippers negotiated exceptions to that change with their carriers. Well the opportunity exists for billing disasters of biblical proportions. I have already detected some doozies, in particular with firms that have multiple shipping sites, where the concession was only coded to one location, not all.

I also found that when a concession changed with one carrier it whipped out all the other negotiated discounts and the coding clerk missed rekeying all the discounts for air and accessorial. Although air was only a small part of one shippers business the accidental elimination of the air discounts costs thousands. Nobody was checking because the firm was not an “air shipper”. 

Don’t let the overcharges build up. The carriers have time limits on how far back you can go for filing overcharge claims. Normally its 90 days. Don’t leave yourself exposed to criticism by management that you cost the firm thousands or tens of thousands because nobody was verifying the amount the carrier was charging. My experience is that an ounce of prevention is worth a pound of cure. You will be well served by spending some time in the next few weeks checking your invoices and asking for explanations from your rep when you find that your number, and their number don’t necessarily agree.

Jerry Hempstead can be reached at 407-342-3825 or gmhempstead@aol.com.